Bingaman readies efficiency bill, eyes incentives for decoupling

Washington (Platts)--23Mar2007

US Senate Energy and Natural Resources Committee Chairman Jeff Bingaman
said Friday that he is preparing to offer legislation on energy efficiency in
early April that may include incentives for state utility regulators to pursue
certain rate designs to encourage greater efficiency.

"One of the areas that some states have moved ahead on is to try to
decouple utility profits from utility sales in the rate structures," Bingaman,
Democrat-New Mexico, said in a wide-ranging briefing organized by the US
Energy Association.

"That's a matter for state regulation, but there may be ways the federal
government can provide incentives for states to look at that," he added.

Bingaman said the bill is still being finalized in the area of
electricity efficiency, but he has found that the most significant actions
that have been taken around the country have occurred at the state regulatory
level.

"We are looking for ways the federal government can incent the states,
more states, to take the kind of enlightened view that a few states have taken
in encouraging more efficient use of electricity," the chairman said.

The legislation will also include a national renewable portfolio standard
to encourage the use of more low-emissions energy supplies. Such a provision
offered by Bingaman has cleared the Senate in the past, but the pending
measure is expected to be more aggressive with a 15% requirement by 2020. The
bill would also extend tax breaks for renewable energy provided in the Energy
Policy Act of 2005.

The National Association of Regulatory Utility Commissioners has been
examining electricity efficiency through a nearly year-long collaborative
effort with electric utilities dubbed the National Action Plan for Energy
Efficiency. Asked about potential legislation offering incentives for
decoupling, NARUC said it was open to work with the senator.

"We look forward to working with the senator on these issues as he moves
discussions forward and informing him and others in the process," said NARUC
spokesman. "There are different ways of encouraging energy efficiency and
these are decisions states are already considering on their own. We are
interested in finding the best ways to encourage energy efficiency."